Brown tells ministers to keep control of spending

Gordon Brown last night ruled out a pre-election spending spree as he issued a tough public warning to cabinet colleagues to rein in demands for extra money.

Gordon Brown last night ruled out a pre-election spending spree as he issued a tough public warning to cabinet colleagues to rein in demands for extra money.

The Chancellor set the scene for the three-year government-wide spending blueprint that he will release next Monday by saying that big increases in health and education spending would not be matched other areas.

At last Thursday's cabinet meeting Mr Brown demanded strong financial discipline from all ministers in what was seen as a coded rebuke to the Home Secretary, David Blunkett, and the Defence Secretary, Geoff Hoon. They have appealed for Tony Blair's support as they battle with the Treasury over the budget figures to be announced next week.

Mr Brown made his private strictures to his fellow ministers public in his speech to the CBI president's dinner in London. In unusually strong language, he said he would "demand" that investment was matched by reform, extra money was channelled to frontline services and that all Whitehall departments met the efficiency targets set by the Treasury.

Although he has not been closely involved in the five-year plans for health and education, he will adopt a more "hands-on" approach to the five-year programmes being drawn up by other departments to ensure that money is not wasted.

In last night's speech the Chancellor dismissed fears expressed by Mervyn King, the Bank of England governor, that his budget deficits were too high and predictions by some economists that he was in danger of breaching his "golden rule" - only borrowing to fund public investment over the economic cycle.

Mr Brown insisted that he would not repeat the mistakes of previous Labour and Tory administrations, which relaxed their grip in the run-up to a general election. Current spending would grow no more than an average of 2.5 per cent in real terms between 2006 and 2008, he said.

"In next week's spending review there will be no short- termist quick fixes, no irresponsible pre-election spending sprees, a ruthless focus on priorities and no relaxation of our fiscal discipline. We will - over this cycle and the next - continue to meet our strict fiscal rules, while meeting the commitments we have made on investment in health and education," he said.

He said the Government's priority was not to put at risk the hard-won fiscal discipline that had delivered the longest period of continuous economic growth for 200 years."Where there are increased resources to departments, I will demand that these resources go to the front line, I will demand that the investment is matched with reform, and I will demand that each department meets the efficiency targets we have set."